Portfolio management: Do it better and business will boom

Several leading US companies are forming a new council to promote improved project and portfolio management across industries.

Founding members of the Portfolio Management Advisory Council include AAA, Boeing, Safeway, Visa and Washington Mutual along with participants from the analyst and academic communities.

Their first meeting is scheduled for 21 March in San Francisco.

San Retna, chief portfolio officer at the Northern California affiliate of motor club AAA, told silicon.com he spearheaded the formation of the council because he feels the state of portfolio management in many enterprises has "significant shortcomings".

"In most organisations today the people that [allocate] investments and the people who execute ideas are two separate groups and they don't communicate," he explained.

Retna believes you need people "way upstream" of IT, HR or finance directors making decisions about which sort of projects the organisations will undertake.

Council participants will share with each other their management successes and failures as well as assets they've used to more effectively orchestrate their businesses, including resource management or prioritisation applications they've built.

The right tools for the job are hard to find, according to Retna. He said many enterprise resource planning vendors tout their applications as "soup to nuts" for business decision making "but that's not the case and we all know it".

After educating each other on what works and what doesn't, the council will pass on their recommendations for portfolio management best practices across industries.

Ultimately Retna believes if the council can enable better resource management, "we will see acceleration of business results".

Since adopting stricter portfolio management discipline - which includes forward planning as well as assessing results after a project is finished - AAA has seen more than 80 per cent of projects completed on time, on budget and within scope, according to Retna.

This compares to an industry average of 30 to 45 per cent, he said.

While the council is starting up in the US, Retna hopes to expand it to include Europe, Australia and the rest of the world in future.

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